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Two firms with identical assets, Levered and Unlevered, generate identical cash flows. Unlevered is an all-equity firm, with 300,000 shares outstanding that trade for a

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Two firms with identical assets, Levered and Unlevered, generate identical cash flows. Unlevered is an all-equity firm, with 300,000 shares outstanding that trade for a price of $13 per share. Levered has 1.2 million shares outstanding and $1.3 million dollars in debt at an interest rate of 5%. According to Modigliani-Miller Proposition 1, the stock price for Levered is closest to: Select one: O a. $2.00 O b. $13.00 O c. $12.00 d. $6.00

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